When he was very young, Gangzi wanted to be a securities analyst.

Like the Wolf of Wall Street, he had meetings and conversations with all kinds of successful people during the day, and dinner was all high-end business banquets. after getting slightly drunk, he returned to the hotel, picked up a cigarette, began to write an analysis report, and after it was released in the early morning, the company's stock price changed because of his own report the next morning. He reached a state that was more satisfied than a little drunkenness, stretched out the window, got up enthusiastically, and started a new day's work.

During the college entrance examination, Gangzi lived up to expectations and was admitted to a major in finance in a key university of finance and economics, and his senior year was successfully admitted to the university with a master's degree. In order to realize his dream, he worked very hard and graduated with honors. At the same time, he also passed the CFA and CPA professional examinations.

Although it is extremely difficult for fresh graduates to enter the securities analysis industry in the past two years, Gangzi was lucky to be hired by a medium-sized securities analysis firm when he graduated in 2018.

When I just graduated, I found that securities analysis institutions prefer graduates with science and engineering background, because most listed companies are engaged in science and engineering business, such as electronics, materials, medical treatment, chemical industry, etc., without corresponding professional background, it is impossible to have an in-depth understanding of enterprises and industries, let alone express professional opinions.

Gangzi has been arranged to provide financial assistance to industry analysts.

Because Gangzi has certain financial skills, he can basically understand financial statements, calculate various financial ratios according to what he has learned in books, and analyze them according to book knowledge.

A more important skill is to prepare simulated financial statements for the next few years based on forecasts.

This is the essence of the securities analysis industry. According to the forecast earnings per share in the next few years, multiplied by the selected price-to-earnings ratio, the forecast stock prices in the next few years are obtained, and then compared with the current stock prices, according to the size of the gap, give the conclusion of "recommended buy" and "strongly recommended buy", the conclusion of "sell" will not be issued, as for why, we do not know, it may be the usual practice.

The main work of industry analysts is to get the future changes of the financial data of listed companies based on the research results of the industry and companies.

The main work of Gangzi is to compile simulated financial statements according to the data base and the range of changes. for those who have no actual financial work experience, this work is very difficult. fortunately, the organization has a mature Excel calculation template, and with the help of tools, Gangzi can still be competent.

When Gangzi took part in the work in July 2018, it was during the disclosure period of the semi-annual report of the listed company, and the whole organization was very busy. According to the disclosure data of the semi-annual report, it was necessary to verify whether the object of study was in line with expectations, and revise the original forecast data.

Gangzi's job is completely different from what he used to look forward to, such as flying around every day, talking with executives and investment managers of listed companies, high-end banquets in the evening, and staying in a five-star hotel, because Gangzi's job does not require a business trip at all. just stay in the office and mess around.

Even an industry analyst is not living the life that Gangzi dreamed of.Executives of listed companies do not have so much time and need to meet with analysts every day, and they all know that the value investment atmosphere in our securities market is insufficient, and investment decisions do not attach so much importance to analyst reports, and people are still keen to speculate on topics and concepts. and institutions do not support analysts to live like Wall Street wolves in order to control costs.

However, Gangzi still worked very hard.

All the financial data extracted from listed companies strive to be every penny.

The forecast change rates provided by industry analysts are regarded as "edicts" and entered without error.

He has to check the forecast results several times for fear of any mistakes, because he thinks that even if the profit forecast is only 10,000, according to the price-to-earnings ratio of dozens of times, it is still hundreds of thousands of valuation errors, which is more than his one-year salary.

Listed companies' existing and forecast financial data, even if there are only minor changes, should be carefully analyzed.

such as,

The income has increased from 1 billion to 1.1 billion. Gangzi thinks that this is the performance of the company, and we must find out the reason. Is the fund-raising project put into production? Has the market share increased? Has the bargaining power increased? Has the industrial chain extended? Has the industry changed?

The gross profit margin has increased from 17% to 18%. Gangzi thinks that this is the performance of the company's competitiveness and the enhancement of bargaining power. Cost control has been strengthened? Have you launched a new product? Is there a scale effect? Has the price of raw materials been reduced?

Profits increased from 30 million to 35 million, Gangzi believes that this is the performance of the company's profitability has been improved, from the income, costs, expenses, investment income, non-operating income and expenditure, to find reasonable reasons.

Millions of yuan of impairment provision, Gangzi will attract great attention, analysis of the reasons, and focus on tips in the analysis report.

In addition, Gangzi will carefully analyze the turnover, return on assets, debt repayment ratio, data per share, and so on, and describe them in detail in the analysis report.

Gangzi has a great sense of achievement and thinks his work is very meaningful.

Before that, Gangzi had experienced the Black Swan incident.

In late June 2018, when the entry procedures were completed, the Shenzhen Stock Exchange announced that the fraudulent issuance had officially activated the compulsory delisting mechanism for Jinya Technology, and Jinya Technology's abominable fraud was explained by the teacher as a typical case when Gangzi was at school.

However, Gangzi thought that the typical cases of financial fraud in the market were mentioned over and over again in class.Yin Guangxia, Nantian Co., Ltd., Wanfu Shengke, Green Land, Jinya TechnologySo a few, it seems, compared with two or three thousand listed, the probability is still very low.

In early July 2018, when Gangzi just joined the industry, the Shenzhen Stock Exchange issued an announcement that Abbott was transferred to the public security organ by the China Securities Regulatory Commission on suspicion of illegal disclosure and non-disclosure of important information. between 2015 and September 2016, Abbott falsely increased its income by 580 million and its profit by 260 million. This financial fraud was so bad that it even alarmed the Ministry of Foreign Affairs because the counterfeiting project took place abroad and required the cooperation of other countries to collect evidence. With a false increase of 260 million in profits, Gangzi dared not even think of so much money.

In July 2018, it also happened.Long-growing organismAfter the outbreak of the vaccine incident, Changsheng fell continuously to the limit, and its stock price once fell from 24.55 yuan to 2.66 yuan. during this period, 36 "one" words fell to the limit, with a cumulative drop of nearly 90%. Gangzi believes that this incident has nothing to do with finance and belongs to the category of illegal business.

After analyzing the semi-annual reports of listed companies from July to August in 2018, Gangzi finally got a kick in September, waiting for the listed companies to disclose their three-quarter reports in October and repeat what they did in the semi-annual reports.

As it is expected that the current year's "net profit will be negative", "net profit will rise or decrease by more than 50% compared with the same period last year", and "turn losses into profits", listed companies shall (Shenzhen Stock Exchange) or can (Shanghai Stock Exchange) make performance forecasts in the three quarterly reports.

Therefore, when analyzing the three quarterly reports, Gangzi also needs to pay close attention to the forecast of listed companies' profits for the whole year. Gangzi mainly does performance forecasts, and listed companies themselves will forecast, and others' own forecasts must be more accurate.

Taking advantage of the free time in September, Gangzi specially studied the performance forecasts of listed companies in 2017, and there were several bad events, such asJianrui VornenIt was expected to make a profit, but disclosed that the annual report lost 3.7 billion.

After reading the performance forecast of the three quarterly reports, Gangzi is still quite gratified. ZTE Corporation is the only one who is expected to lose more than 5 billion in 2018, with a loss of 6.2 billion. After all, the reasons are well known.

There are Ningbo Dongli, Eagle farming and Animal Husbandry, Hengkang Medical treatment, Lion Technology and Tuowei Information.

Ningbo DongliWith a pre-loss of 32-3.3 billion, the company made a profit of 160 million in 2017. the reason for the loss was that the acquired company was insolvent and the relevant goodwill impairment was fully deducted. Gangzi judged that this should be the biggest performance black swan in 2018.

Young eagle agriculture and animal husbandryWith an advance loss of 15-1.7 billion yuan, when the company just joined the industry, it was questioned by the media about financial fraud by the market capital. later, it was difficult to make a good story of "paying debts with meat." the pre-loss was expected.

Hengkang Medical treatmentThe expected loss of 10-1.4 billion was due to the fact that the acquired hospital's performance fell short of expectations. After taking into account the impairment of goodwill, the company made a profit of 203 million in 2017 and lost so much in 2018.

Fierce Lion TechnologyIt was also a pre-loss of 10-1.4 billion. Gangzi felt that if the name was too big and the hold did not live, there would be risks.

Tuo Wei informationThe pre-loss is 10-1.3 billion, with a profit of more than 60 million in 2017, which is also due to the impairment of goodwill.

In the third quarterly report of 2018, the pre-loss is more obvious, it seems that for these six companies, on the whole, the situation is not so bad.

Busy in October, just waiting for the listed company to issue the annual report, tense nerves, suddenly relaxed up.

However, in November and December, which should have been quiet, there were several incidents of performance forecasters.

December twenty _ fourthJubilee TechnologyAccording to the announcement, due to the impairment of goodwill, the pre-loss in 2018 will be 400-700 million yuan.

December twenty _ ninthSociete Generale SecuritiesIssued an announcement, due to the risk of stock pledge repo trading business, the proposed asset impairment of 650 million yuan; Changzhou Aluminum shares announced that it is expected to lose 3.8-450 million in 2018, while the three-quarter report forecasts a profit of 0.75-140 million.

Although there are not many cases, it still makes Gangzi very upset. Why don't these companies play their cards according to the reason? why not disclose in the third quarterly report that three days of freezing was not built in a day? signs of impairment are unlikely to appear in October, when the three-quarter report was disclosed two months ago.

Fortunately, there are only a few people who are unruly, and their 2018 virgin working years are finally over. Now, it's time for listed companies to release their 2018 annual reports to test their forecasts.

Unexpectedly, January 2019 was the month when Gangzi began to doubt his life.

This month, the A-share performance explosion is overwhelmed. The frequency of cases of reducing the performance forecast for 2018 has changed from a few days at the beginning of the month to several a day, and at the end of the month, it has reached dozens of hundreds of companies a day. The amount of pre-reduction has gone from three to five billion, seven or eight billion, more than one billion, to two or three billion, three or five billion to five or six billion, repeatedly setting new highs.

Except for the January of New Year's Day's holiday, Gangzi was restless and at a loss. He used to care about the changes in millions of profits, but now the losses are often hundreds of millions or billions; he used to focus on millions of impairment. And now the impairment is often hundreds of millions, billions.

In the past, Gangzi would focus on 10 million of the performance pre-reduction, but in late January 2019, no one would pay attention to the 200-300 million performance pre-reduction, and no one would pay attention to it. Without a loss of 500 million, I felt embarrassed to issue a performance pre-reduction announcement.

On the evening of January 31, Gangzi counted that as of January 31, 2019, the performance loss in 2018 exceeded 200 million as follows:

• There are 7 companies with an advance loss of more than 5 billion.

• There are 34 companies with a pre-loss of 20-5 billion.

• There are 58 companies with pre-loss of 10-2 billion.

• There are 73 companies with pre-loss of 5-1 billion.

• There are 85 companies with expected losses of 200-500 million.

A total of 257 companies are expected to lose more than 200 million yuan, with a total loss of 318.347 billion yuan. Those that are substantially reduced but do not result in losses are not counted.

Many companies lost more in 2018 than their market capitalization or their total profits since they went public.

The loss of goodwill is about half of the reasons for the loss, but there are also many ingenious explanations, such as the lack of money to buy feed to starve pigs to death.

After losses in 2018, more than 200 companies failed to make up for losses of more than 500 million. According to the average annual net profit of companies from 2013 to 2017, many companies will never be able to make up for their losses. It will take more than a dozen companies hundreds of years or more than a hundred years to make up for the losses.

Without making up for losses, dividends cannot be distributed, so what is the point of carrying out value investment analysis?

There is no way to explain the financial data after a substantial pre-reduction in performance according to the knowledge in the textbook. Ask the seniors that they have never encountered it.

Gangzi felt that his multiple predictions were slapped in the face!

A feeling of being at home and ashamed to meet others!

In the performance forecast, I thought that the profit difference of 10,000 yuan would affect the valuation of hundreds of thousands of yuan, which would result in a loss of hundreds of millions or billions of dollars. Gangzi felt that his past job was to amuse himself.

During the Spring Festival in 2019, Gangzi lost confidence in this securities analysis work and felt that securities analysis did not make much sense if the financial data were not credible.

Relatives and friends have patiently enlightened Gangzi, even if there are hundreds of listed companies focused on performance pre-reduction, but compared to the overall number of listed companies, it is still a minority.

After thinking calmly, Gangzi thought it was reasonable and decided to stick to it. After all, the securities analysis industry is not so easy to enter.

After the Spring Festival went to work, Gangzi made a list of performance exploding stocks, firmly did not touch these stocks, and gave a hint to the market.

Even more unexpected things happened. after the Spring Festival, A Gu began to walk bulls, and stocks generally rose, and the plate that rose the most was that group of exploding stocks, whose rate of increase was obviously higher than that of the market. A month after the festival, the market only rose 20 to 30 percent, while the minebreakers generally rose 70 to 80 percent, and some even doubled, such as young eagle farming and animal husbandry.

Gangzi had serious doubts about the value of his work, and the market actually liked this kind of stock. According to this logic, investors will buy stocks in the opposite direction according to their own analysis report. This is so ironic!

When the 2018 annual report was officially released, listed companies made dozens of repairs on the scars of exploding performance.

such as,

Rich control interactionOriginally expected to lose 1.98 billion, but eventually lost 5.51 billion

OufeiguangReduce profit by 2.36 billion, from profit of 1.84 billion to loss of 530 million

Golden Shield sharesThe profit said to be 100 million turned into a huge loss of 1.8 billion.

ST Qiu LinOriginally expected to make a profit of 80 million, but eventually lost 4.1 billion

Beixun GroupThe original profit was expected to be 0.85-182 million, but the final loss was 1.11 billion

Silver billion sharesIt was originally expected to make a profit of 200 million to 400 million, but eventually lost 470 million.

There are a lot of people who are expected to lose billions of dollars, but they can no longer attract the attention of the market.

However, what really made Gangzi make up his mind to leave the securities analysis industry were two white horse stocks surnamed Kang, both of which had a market capitalization of hundreds of billions a year or two ago.

One isKangmei Pharmaceutical Industry。

When the annual report was released on April 30th, Kangmei Pharmaceutical unexpectedly revealed a fictional bank deposit of 29.9 billion yuan, which is not so much in most prefecture-level cities in China. Profit fraud Gangzi also have to imagine, even bank deposits are so irrefutable projects are fake, the amount is still so large, completely divorced from the cognition of Gangzi.

The other isKang Dexin。

It was also when the 2018 report was disclosed that fictional bank deposits of 12.2 billion yuan were revealed. The key point is that last Friday, the China Securities Regulatory Commission announced that Kang Dexin's total false profit between 2015 and 2018 reached 11.9 billion, which should exceed the sum of the amount involved in the classic financial fraud cases that Gangzi had learned in the past. It is said that Kang Dexin is still trying to keep the company listed under the banner of protecting more than 100,000 shareholders.

Gangzi's inner world completely collapsed!

The basic data are not true, how to talk about value analysis? What is the value of investment? Can securities analysts be blamed for the results of the analysis?

What is the reason for those companies that focus on performance pre-cuts at the same time? Does it involve breaking the law?

Why don't these companies make pre-write-downs in their 2018 semi-annual reports and third-quarter reports? shouldn't they be pre-written when impairment occurs? Is it really such a coincidence that pre-deductions are all concentrated at the same time? Why didn't this happen in the previous year? Doesn't it constitute a violation of information disclosure? Does the law apply in the stock market?

After centralizing the impairment of goodwill at the end of 2018, the total goodwill balance of A shares only decreased from 1.45 trillion at the end of September 2018 to 1.31 trillion at the end of 2018. Will the rest have another big impairment in 2019? Will your prediction be hit in the face again?

These companies are not only still active in the market, but also popular in the market. why on earth?

Gang Zi, who had only one year of work experience, really could not understand these questions, and after consulting his predecessors, he did not get a satisfactory answer, so he decided to work in an accounting firm responsible for auditing listed companies for a few years and explore the reasons from a different perspective.

This is a bit like Mr. Lu Xun abandoning literature to become a doctor at that time.

Gangzi hopes that when he returns to the securities analysis industry in a few years' time, there will be a fundamental change in the market. Gangzi is still very confident about this. He hopes that the securities law being revised and the registration system being promoted will bring great changes to the market.

We wish Gangzi's dream come true!

This article is dedicated to colleagues who want to study the securities market but are not successful!